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Human Action: Austrian Sociology, Lecture 6 with David Gordon - Mises Academy

The Ludwig von Mises Institute
The Ludwig von Mises Institute

Mises draws a distinction between autistic exchanges, which do not involve mutual benefit, and cooperative exchanges, which do. Cooperative exchanges can be contractual, involving symmetrical agreement between parties, or hegemonic, involving asymmetrical direction of a group. While hegemony provides benefits, parties engage in it due to threats. Mises argues calculation in numerical units is important for economics and requires money, though praxeology and categories of action logically precede monetary calculation.

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Austrian Sociology, Lecture 6 David Gordon Mises Academy, April 16, 2013 Chapter IX, pp. 195-200
Autistic and Cooperative Exchange Mises draws a distinction between autistic and cooperative exchanges. Although Mises starts with autistic exchange, its easier to understand what he means if we begin with cooperative exchange. A cooperative exchange is a trade for mutual benefit. I do something for you in order, i.e., to bring about, that you something for me.
Exchange Continued This is what the Latin expression do ut des means. This was originally used in the Roman religion. Someone sacrifices to a god in order to receive benefits in return. Cooperative exchanges go back to prehistoric times. They may have begun through giving presents, hoping for a return gift. They may also have started with barter. The anthropologist David Graeber in his book Debt criticizes economists for assuming that barter comes first, but Mises doesnt say this.
Autistic Exchange An autistic exchange is a non-cooperative exchange. From the name, you might think that an autistic exchange involves only one person. This need not be true.
Autistic Exchange Continued Some autistic exchanges do involve only one person. E.g., someone by himself who is planting a garden. He is trying to exchange his present state of affairs for another state of affairs he prefers. Autistic exchanges can involve more than one person, as long as you are not trying to get a benefit from another person, your exchange with him is autistic. E.g., a war of annihilation.
Example Suppose you give someway a present, without expecting anything in return. This is an autistic relationship. It involves more than one person, but at long one of the persons isnt expected to do anything, the relationship is still autistic.
Cooperative Exchanges Misess concept of a cooperative exchange is also a little tricky. When you hear the word cooperative, you will probably think of a peaceful trade between two or more people. This is just one type of cooperative exchange, although a very important one. This is called a contractual exchange.
Contractual Bonds A contractual exchange is symmetrical. The parties come to an agreement on specific transactions. E.g., Ill give you apples if you give me oranges. In a contractual relationship, no one is giving orders.
Hegemonic Bonds A hegemonic bond is asymmetrical. Someone is directing others. The relationship doesnt usually just cover one transaction. It usually consists of a whole group of activities. A hegemonic bond is a type of cooperative relationship. Why is this? All the parties in a hegemonic relationship are getting some benefit from it.
Hegemony Continued People benefit from hegemonic bonds, even if they would rather not be in this relationship. Why then are they in it? They might think that obeying is the best way to avoid physical threats to them. Remember Misess earlier point that political society rests on willing cooperation. The cooperation doesnt imply approval.
Contract versus Hegemony Contractual relationships are crucial to the development of civilization. Many social theorists have noted the distinction between contractual and hegemonic relationships. These include Adam Ferguson, Claude de Saint-Simon, and Herbert Spencer.
Pro-Hegemony Some writers favored hegemony over contract. These include Werner Sombart, (Heroes or Peddlers) and Nazi philosophers. The Marxists also favor hegemony, both in primitive communism and in the stage of history that follows capitalism. Mises takes anyone who rejects contract and the free market to be a supporter of hegemony.
Economic Calculation Utility is ordinal (first, second, third, etc.) It is not cardinalthere arent units of utility that you can measure. Calculation in numerical units is extremely important in economics. This kind of calculation requires money. Although a great deal of economics deals with calculation in money, this topic logically follows a study of the nature of action.
Calculation Continued Praxeology and economics developed when economists were trying to solve problems that arose once monetary calculation existed. But this fact doesnt alter the logical order in which economics must be studied. The categories of economics, such as action and calculation, are all-or-nothing. Either they apply or they dont.

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Human Action: Austrian Sociology, Lecture 6 with David Gordon - Mises Academy

  • 1. Austrian Sociology, Lecture 6 David Gordon Mises Academy, April 16, 2013 Chapter IX, pp. 195-200
  • 2. Autistic and Cooperative Exchange Mises draws a distinction between autistic and cooperative exchanges. Although Mises starts with autistic exchange, its easier to understand what he means if we begin with cooperative exchange. A cooperative exchange is a trade for mutual benefit. I do something for you in order, i.e., to bring about, that you something for me.
  • 3. Exchange Continued This is what the Latin expression do ut des means. This was originally used in the Roman religion. Someone sacrifices to a god in order to receive benefits in return. Cooperative exchanges go back to prehistoric times. They may have begun through giving presents, hoping for a return gift. They may also have started with barter. The anthropologist David Graeber in his book Debt criticizes economists for assuming that barter comes first, but Mises doesnt say this.
  • 4. Autistic Exchange An autistic exchange is a non-cooperative exchange. From the name, you might think that an autistic exchange involves only one person. This need not be true.
  • 5. Autistic Exchange Continued Some autistic exchanges do involve only one person. E.g., someone by himself who is planting a garden. He is trying to exchange his present state of affairs for another state of affairs he prefers. Autistic exchanges can involve more than one person, as long as you are not trying to get a benefit from another person, your exchange with him is autistic. E.g., a war of annihilation.
  • 6. Example Suppose you give someway a present, without expecting anything in return. This is an autistic relationship. It involves more than one person, but at long one of the persons isnt expected to do anything, the relationship is still autistic.
  • 7. Cooperative Exchanges Misess concept of a cooperative exchange is also a little tricky. When you hear the word cooperative, you will probably think of a peaceful trade between two or more people. This is just one type of cooperative exchange, although a very important one. This is called a contractual exchange.
  • 8. Contractual Bonds A contractual exchange is symmetrical. The parties come to an agreement on specific transactions. E.g., Ill give you apples if you give me oranges. In a contractual relationship, no one is giving orders.
  • 9. Hegemonic Bonds A hegemonic bond is asymmetrical. Someone is directing others. The relationship doesnt usually just cover one transaction. It usually consists of a whole group of activities. A hegemonic bond is a type of cooperative relationship. Why is this? All the parties in a hegemonic relationship are getting some benefit from it.
  • 10. Hegemony Continued People benefit from hegemonic bonds, even if they would rather not be in this relationship. Why then are they in it? They might think that obeying is the best way to avoid physical threats to them. Remember Misess earlier point that political society rests on willing cooperation. The cooperation doesnt imply approval.
  • 11. Contract versus Hegemony Contractual relationships are crucial to the development of civilization. Many social theorists have noted the distinction between contractual and hegemonic relationships. These include Adam Ferguson, Claude de Saint-Simon, and Herbert Spencer.
  • 12. Pro-Hegemony Some writers favored hegemony over contract. These include Werner Sombart, (Heroes or Peddlers) and Nazi philosophers. The Marxists also favor hegemony, both in primitive communism and in the stage of history that follows capitalism. Mises takes anyone who rejects contract and the free market to be a supporter of hegemony.
  • 13. Economic Calculation Utility is ordinal (first, second, third, etc.) It is not cardinalthere arent units of utility that you can measure. Calculation in numerical units is extremely important in economics. This kind of calculation requires money. Although a great deal of economics deals with calculation in money, this topic logically follows a study of the nature of action.
  • 14. Calculation Continued Praxeology and economics developed when economists were trying to solve problems that arose once monetary calculation existed. But this fact doesnt alter the logical order in which economics must be studied. The categories of economics, such as action and calculation, are all-or-nothing. Either they apply or they dont.